Developer: Lawsuit scared Costco away

CourtesyWal-Mart has purchased an 18.5-acre site in North Auburn, with plans to build a center that could include a storefront similar to this one.

Could the threat of a lawsuit by a community group have scared Costco away from buying a prime North Auburn site?
And did that set the stage for Wal-Mart to ultimately make the deal as the lone corporate suitor left in a high-stakes game?
A spokesman for Bohemia Properties said Tuesday that the Alliance for the Protection of the Auburn Community Environment (APACE) lawsuit threat played a major role in a Costco decision late last year to withdraw as a potential buyer.
But an APACE leader said that the property developers are throwing out allegations that have no foundation in truth in an attempt to turn area residents against the group’s ongoing efforts to fight the project in court under state environmental-quality laws.
In the wake of Monday’s disclosure that Wal-Mart has bought the 18.5-acre Bohemia property near Luther Road and Highway 49, Bohemia Properties spokesman Steve Cavolt said Tuesday that developer Jim Conkey had made no decision on a buyer before the Wal-Mart offer was accepted Dec. 29.
“To reject all of the loud declarations from APACE that still have no basis in fact – we vehemently maintain that Wal-mart was never the end user who was pegged for the Bohemia site from the get go,” Cavolt said. “In fact, there were three end users in the mix – Lowe’s, Costco and Wal-Mart.”
Cavolt said that after the Placer County Board of Supervisors approved the project in September and “APACE declared war … Costco decided at this point that they were unwilling to take on the lawsuit while Wal-Mart was.”
“Bottom line is Wal-Mart met the terms and conditions financially, they were willing to use local contractors, and they were willing to take on the lawsuit,” Cavolt said. “In spite of what APACE will continue to claim, for those of you who have an issue that it is not Costco, you can thank your friends at APACE for contributing to Costco’s decision to withdraw.”
Victoria Connolly, an APACE leader, said after Wal-Mart was disclosed as the new property owner Monday that Conkey had tried to deceive the community for years on what was targeted for the site by mentioning other potential buyers, such as Costco.
Connolly, APACE members Lee Lively, Joseph Marman and Lari Knedel were specifically singled out by name by Cavolt, as was activist Dale Smith.
“Relative to Mr. Cavolt’s statement about Costco backing away from buying the property, obviously it would be interesting to see documentation supporting that,” Connolly said. “Dale Smith is not an APACE member, but many more in the community are and we have received support and donations from them.”
Connolly cited its 650-member Facebook page as an example of its continuing community support.
Cavolt said Conkey decided not to strike a deal with anyone until after the project was approved by the county. The purchase was finalized in December, at a price of $10 million.
“Early on, the third party decided to withdraw their interest, which left Costco and Wal-Mart. Both approached Mr. Conkey with viable offers on the Bohemia property,” Cavolt said.
Smith said that because Lowe’s doesn’t sell gas, Cavolt “shoots himself in the foot” by saying the home improvement corporation was in the mix.
“Gasoline revenue is very important and would have been only for Wal-Mart and Costco,” Smith said.
Smith said he also has his doubts that the lawsuit was ever much of a factor in negotiations with Wal-Mart, even under the scenario Cavolt described.
“They may have played it that way to their so-called suitors, but that was mainly a ploy to get the one with the biggest pockets to come forward,” Smith said. “Ten million bucks for that lousy property is a joke. And it’s ironic that a major lawsuit issue with Wal-Mart was announced today to go before the Supreme Court.”
Calls to both Wal-Mart and Costco for response to the property purchase and Cavolt’s statement were not returned by press deadline.
The news that Wal-Mart now owns a property that has been a development battleground for nearly two decades drew a mixed reaction from residents Tuesday.
Dave Parmenter, owner of California Hardwood Producers, said he never believed that anything but a Wal-Mart was in the plans. Now that Wal-Mart has ownership, he said the concern for him is whether smaller businesses will be crowded out.
“Development was bound to happen – it’s an old sawmill site and overall, it’s a blighted property that needed something,” Parmenter said. “I just hope it doesn’t have a negative effect on small businesses.”
Cathy Nesterowicz, owner of Uncle J’s yogurt and ice cream shop, said she’s feeling good about having Wal-Mart as a neighbor.
“Any growth in this area in business will make other businesses interested will help our center fill,” she said. “This is going to spur business for everyone.”